Statewide Legal Representation for Transactions and Controversies Involving Texas Oil and Gas Production Taxes
Texas law imposes various taxes on oil and gas production activities, including on producers and other parties. These taxes can be substantial, and nonpayment (or suspected nonpayment) can trigger high-risk scrutiny from the Texas Comptroller.
Our lawyers represent well owners, producers, purchasers, and other parties in all types of controversies involving Texas oil and gas production taxes. We represent clients in connection with tax-related transactions and disputes arising from these transactions. Led by founding attorney Lawrence Brown, our team has extensive experience in this area and relies on it to help our clients make informed, strategic decisions in all legal matters.
Matters We Handle
The following are representative examples of the oil and gas production tax matters our lawyers handle for clients throughout Texas:
Tax Structuring of Production Payments
Tax structuring of production payments can significantly affect producers’ and other parties’ overall tax liability. Our lawyers assist companies with complex tax structuring, taking a detail-oriented approach focused on both minimizing our clients’ tax liability and being prepared to substantiate compliance with the Texas Comptroller if necessary.
Tax Partnerships and Related Transactions
Our lawyers also advise clients on tax partnerships and related transactions involving oil and gas production in Texas. We assist with structuring all types of transactions involving well owners, producers, investors, and other parties, emphasizing clarity and tax savings while also giving due consideration to other key commercial terms and protecting our clients’ interests in the long term.
Lease Agreements and Disputes
We represent clients in negotiating lease agreements for land and all types of production assets in Texas, with a particular emphasis on tax strategy and mitigation. Our lawyers are also available to assist clients with royalty disputes, indemnification claims, and other commercial and legal disputes arising from oil and gas leases in Texas.
Oil and Gas Production Tax Audits
As noted above, facing scrutiny from the Texas Comptroller related to oil and gas production taxes can expose companies to substantial liability risks. Our lawyers have decades of experience representing clients during Texas Comptroller audits. When defending clients during these audits, we take a comprehensive, proactive approach to securing favorable resolutions as efficiently as possible.
Oil and Gas Production Tax Litigation
In addition to defending clients during Texas oil and gas production tax audits, we represent clients in litigation over disputed tax liability. If your company is unable to secure a favorable resolution working directly with the Texas Comptroller, our lawyers can take the necessary steps to dispute your company’s purported tax liability in state court.
Why Work with a Texas Oil and Gas Tax Lawyer at Brown PC
Given the amount of money at stake in controversies over Texas oil and gas production taxes, it is imperative that companies facing these disputes engage experienced legal counsel. Here are just some of the reasons why producers, investors, and other parties choose to work with the Texas oil and gas tax lawyers at Brown PC:
- Our Experience – Our lawyers have decades of experience representing clients in complex state and federal tax matters in Texas. Helping clients resolve high-stakes tax controversies is the core of our practice, and our lawyers work with clients to address complex tax issues daily.
- Our Focus – Our practice is focused on tax law. Brown PC is a Texas tax law firm that represents companies and high-asset individuals in matters involving the Internal Revenue Service (IRS), Texas Comptroller, and other taxing authorities. All of our attorneys practice in this area and bring a wealth of insights to the table.
- Our Successes – Our successes speak for themselves. While past results do not guarantee future outcomes, we have an extensive track record of helping our clients avoid liability in high-risk scenarios. This includes, but is not limited to, scenarios involving potential liability for Texas oil and gas production taxes.
FAQs: Texas Oil and Gas Tax Compliance and Defense
What are the standard severance tax rates for Texas oil and gas?
At the time of writing, Texas’s standard severance tax rates for oil and gas are as follows: (i) 4.6 percent of the market value of oil produced; (ii) 7.5 percent of the market value of gas produced and saved; and (iii) 4.6 percent of the market value of condensate. However, multiple severance tax exemptions and other incentives are available, and generally speaking, taxpayers can choose the most favorable incentives based on their specific operations and circumstances.
What is the new “restimulation well” exemption (HB 3159)?
Enacted in 2025, Texas House Bill 3159 (HB 3159) established a new severance tax exemption for oil and gas produced from a qualifying “restimulated well.” Restimulated wells are defined as “a previously completed oil or gas well that, following production of hydrocarbons, became an inactive well and subsequently received a restimulation treatment,” and they must be certified by the Texas Railroad Commission.
When are tax reports due for oil and gas production in Texas?
In Texas, the due dates differ for oil and gas production reports. Reports for oil taxes are due on the 25th day of the month following the production month, while reports for gas taxes are generally due on the 20th day of the second month following the production month. For annual filers, gas tax reports are due on February 20 for the preceding year.
Contact Brown PC for More Information
If you would like to speak with one of our senior tax lawyers about any oil or gas production tax matter in Texas, we invite you to get in touch. We work with companies involved in the oil and gas industries in all capacities statewide. To request a confidential consultation, call us at 888-870-0025 or contact us online today.